Concessions: Quite the moneymaker for stadiums

There’s a reason “Take Me Out To The Ballgame” includes a verse about peanuts and Cracker Jack. Even as far back as 1908, when the song was written, concessions were an important part of the fan experience – and the team’s bottom line.

It’s true more than ever now, as stadiums are supplementing the classics with everything from local to international selections. How did we get here?

Part of what drove the evolution was a wave of stadium renovations and new construction in the 1980s. The old, concrete bunker stadiums of the 1920s through 1950s had limited space and weren’t properly ventilated for cooking, so the options were limited to cold items or items that were cooked offsite and delivered to the stadium. The newer venues could be designed with concessions from the ground up.

Another factor was increasing ticket prices and events that were attracting a more-demanding fan. The sporting event is now an experience, not just a contest.

“Concessions became a big deal, because when teams are charging people a lot more money to see a game, expectations are raised,” Amusement Business senior editor Steve Cameron told the Chicago Tribune. “Fans don't want the greasy hot dog and a flat beer. It just won't work anymore.”

It also helps that new stadiums are constantly trying to one-up each other in every way possible.

Along the way, concessionaires learned that speed wasn’t as important as they thought. People were willing to stand in line for a specialty product or brand name. Anyone who’s been to a Phillies game has seen fans willing to miss a couple of innings of play to stand in huge lines for Tony Luke’s or Chickie’s & Pete’s.

Just how profitable can it be? Data is hard to come by, but here’s an example from the University of Louisville athletic department. In 2010, the university received $785,000 in revenue from its seven home football games. That revenue came from an agreement with Centerplate, the concessionaire operating at the stadium, entitling the school to 30 percent of sales.

That means that Louisville sold about $2.6 million in concessions, or about $373,000 per game. And that stadium’s maximum capacity is only 55,000. Imagine what kind of sales Beaver Stadium must do on Saturdays and what income that means for Penn State. West Virginia University recently started selling beer at its home football games and raked in $520,000 in beer alone in just the first year.

Over the last decade, another hot trend has been “all you can eat” ticket packages. Fans either sit in special sections and gorge off the limited menu or get a wristband or ticket to show at stands around the game. This has also offered teams an opportunity to take fans out of higher-demand seats and put them in more lightly used seats. The Pirates, Flyers and even the Harrisburg Senators all offer all-you-can-eat packages.

Of course, you can’t talk about concessions without talking about the prices. So why are hot dogs $6, beer $8?

“Those numbers are typically not disclosed, but it's not unusual for the team to get 40 to 45 percent of the gross,” says Jim Grinstead, publisher of the annual reference guide, Revenues From Sports Venues. “That's a big chunk of money, and that's also one of the reasons you see concessions prices as high as they are.”

Keep that in mind next time you’re wincing at the menu board. It’s not the vendors’ fault – they have to pay a pretty high price to be there, too.